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Townsend, P. & Lee, C. (2010). The Relevance of Human Resource Management Theory on the Management Practices of Hospitality Providers on Phillip Island Victoria, Research and Practice in Human Resource Management, 18(2), 61-76.

The Relevance of Human Resource Management Theory on the Management Practices of Hospitality Providers on Phillip Island Victoria

Peter Townsend & Christine Lee


Seasonal consumer demand fluctuations for small hospitality businesses create management challenges, with human resource management (HRM) being specifically identified as a ‘problem’. In fact, the different academic and practitioner perspectives of HRM in this industry create a credibility gap, resulting in a combination of uninformed strategic planning and practice activities, to exacerbate the issue of market entry and firm sustainability. This study examines the management practices of businesses located on the popular Phillip Island destination in coastal Victoria, and explores the practical management strategies used as well as assessing the relevance of academic theory to these providers. The paper also reviews the relationship between the theory and practice of HRM that exists in the hospitality sector, particularly in relation to seasonal small businesses. Using a qualitative design, patterns of HRM strategies and operational responses were identified to reveal challenges for service quality and business success, that are linked with selecting, recruiting, and motivating talented people. The results reveal the employed staffing procedures use a combination of practical HRM approaches, including casual and flexible employment processes, but without an apparent academically based strategy, which can have implications for small hospitality business. A concluding observation is the planning of more informed strategic HRM approaches has potential to not only increase the effectiveness of the employee and employer relationship, but also recognise the welfare of employees is fundamental in the achievement of organisational objectives.


The hospitality industry has often missed out on the benefits of human resource strategies used by management. Among the reasons is the fact that “… hospitality management has been hived off as a separate discipline in those universities which offer degrees in the field.” (Price 1994: 44). Research findings in this area have been mainly published in specialist hospitality management journals which has contributed to the general attitude of insularity (Wood 1992) often found amongst academics and practitioners in the industry. Other reasons why businesses in the hospitality sector often do not adopt strategic human resource management (HRM) include the size and nature of the organisation, insufficient studies that cater for the sector (Beaver & Lashley 1998), lack of congruence between management research conducted by academics and that used by practitioners (Hughes, O’Regan & Wornham 2008) and the unwillingness of owners to implement human resource strategies that would cost them time, effort and money (Patel & Cardon 2010).

This paper analyses the impact of seasonal demand changes and subsequent management practices adopted. The paper assesses the relevance of these practices in terms of existing HRM theory, which includes the different approaches to HRM, and specifically, the needs of hospitality providers on Phillip Island in Victoria, which predominantly consists of small firms, a long established feature of the industry (Beaver & Lashley 1998). Indeed, “… the very origin of the industry in domestic settings suggests that hospitality is a small-scale inter-personal activity.” (Beaver & Lashley 1998: 223), and whilst larger providers have also been interviewed in this study, much of the focus tends to centre on the small and micro businesses.

In order to achieve its aim this literature will first provide an overview of the impact of seasonality (Koenig-Lewis & Bischoff 2005) and competition on the hospitality sector (Beaver & Lashley 1998). The manuscript will then define HRM, and in particular, the soft and hard variant of the concept (Storey 1998). Next, the paper discussed the various studies that support the findings that there is a gap between HRM theory and the practice (Kelliher & Johnson 1997, Beaver & Lashley 1998, Storey 1998, Hughes, et al. 2008). Subsequently, the paper argues the need of an effective HRM approach to cater for the accommodation providers facing the impact of seasonality and market competition (Kelliher & Johnson 1997, Storey 1998, Lowry, Simon & Kimberley 2002, Patel & Cardon 2010). This study concludes that whilst the much literature is devoted to HRM strategies very few address the HR strategy needs of these businesses.Whilst the hospitality providers use some management response practices (such as personnel management) and operational approaches, they do not implement any rigorous strategic HRM practices which are essential for any long term survival of businesses (Beaver & Lashley 1998, McElwee & Warren 2000, Hughes, et al. 2008). Hence, there is a need to close the academic/practitioner gap that would ensure the effectiveness of firms in the hospitality industry, characterised by small scale, inter personal activities.

Literature Review

In order to assess the relevance of HRM strategies, the impact of seasonal demand and competition need to be examined first. The following discussion focuses on how seasonality and competition affects the hospitality industry and accommodation providers.

Impact of Seasonality (Seasonal Demand Change)

Seasonality is one of the most distinctive features of tourism, bringing in movement of people on a short term basis which may be the most typical characteristic of tourism on a global basis (Butler 2001). Whilst the term seasonality implies weather related influences, there are two academic factors related to the concept of seasonality. These are natural and institutional seasonality (Commons & Page 2001, Goulding, Baum & Morrison 2004).The natural description relates to natural climatic occurrences, such as rainfall and temperature. In comparison, institutional seasonality generally relates to human behaviour based activities, such as holidays and sporting events (for example motor or bike racing).

Seasonality does not refer to unusual events such as natural disasters, terrorism or other crisis (Witt & Moutinho 1995). Seasonality can be described as the change of tourist flows during the business period. According to Butler (2001: 5) seasonality can be defined as“…a temporary imbalance in the phenomenon of tourism which may be expressed in terms of dimensions of such elements as numbers of visitors, expenditure of visitors, traffic on highways and other forms of transportation, employment and admissions to attractions”. Another definition of seasonality is “… the systematic, although not necessarily regular, intra-year movement caused by changes in the weather calendar, and timing of decisions, directly or indirectly through the production and consumption decisions made by the agents of the economy.” (Hylleberg 1992: 4). Whilst there is no generally accepted definition of seasonality with reference to tourism (Koenig-Lewis & Bischoff 2005) it is generally agreed that the most important significant aspect of seasonality is that it involves the concentration of tourist flows in relatively short periods of the year (Alloc 1994). This inadvertently leads to demand fluctuations in many tourist destinations, including to some extent, Phillip Island.

The concept of demand fluctuations from seasonality has been studied by a number of tourism researchers (Ball 1988, Commons & Page 2001). These intra year fluctuations have been found to cause excessive demand for tourism facilities and infrastructure for part of the year, but an inefficient use of these resources during the remaining part of the year (Butler 2001). Whilst some would argue that the change in seasonal demand has advantages when taking an ecological and socio cultural perspective (Murphy 1985, Higham & Hinch 2002), the majority of the academic literature identifies it as a problem which has to be overcome, modified or reduced in effect (Butler 2001, Koenig-Lewis & Bischoff 2005). This perspective is held because the high and low season customer variations create periods of low income, inefficiency or extra costs to supply temporary demand (Manning & Powers 1984).

On the positive side the demand change in seasonality can be of benefits to both employer and casual employees. Seasonality does have positive opportunities, with the off peak time perceived as a time where tourist operators may be able to enjoy a holiday from the stress, or be involved in repairs and maintenance. Organisations are also expected to include social effects as part of their strategies, and it is inappropriate to ignore the community stakeholders who live in the tourist location (Jones, Felps & Bigley 2007). This also fits well with the pull motivation factors of small business, for a flexible life style and family employment (Loscocco 1997).

Impact of Industry Competition on Small Business

There is an assumption that businesses will have a strategic plan, but small business plans are more for the benefit of the lending bank, often without strategic HRM plans of even the most limited type (Humphrey 2004). Studies have consistently reported that owners and managers of SMEs are generally weak in the fundamental skills of strategic planning, financial management, HRM and marketing (McElwee & Warren 2000) and being responsible for all these functions can be very stressful (Burns 1997).

The hospitality industry is also characterised by low barriers to entry and many would be entrepreneurs feel that they have the technical competence for success because of the link between hospitality and domestic activities (Beaver & Lashley 1998). As a result, small firms providing accommodation, food and drinks are quite significant in the hospitality industry. Many of these firms do compete successfully in their local market. However, the growth of a small number of huge national and international organisations is not to be ignored.Whilst, in theory, small hospitality businesses have the considerable advantage of being able to respond and cater to customer’s individual needs and demands, they are generally losing market share to the bigger operators. Larger firms have the advantages of operating on a more economic scale, establishing brands and offering lower costs as well as offering appropriate training to employees and limiting staff turnover (Beaver & Lashley 1998). Still, the level of skills and talents together with the limited aims and objectives of those who own and manage small hospitality firms are significant factors in their future existence.

In response to seasonality, possible business strategies include different forms of organisational flexibility: functional, financial and procedural (Brewster, et al. 2008). Functional concerns responses to market demand, financial involves banking and cash flow, while procedural refers to methods of adapting the size of the workforce to business needs (Holland & De Cieri 2006). Human resource responses to external strategic change are also documented in theoretical form. These flexible methods of adaptation permit the provision of more efficient supply for the service sector.

From an operations perspective a number of strategies that are used to manage these effects includes consideration of consumer behaviour and integrating the marketing mix. Providers connected to international chains have a more stable supply of clients. In practice, individual businesses either employ a cost differentiation strategy or offer a product diversification approach. Consumer needs vary, with a subsequent change in elasticity of demand concerning pricing. Peak season prices are, therefore, higher, but winter customers have lower cost options. This requires an operations response, usually in the form of staffing changes. Whilst seasonal demand changes can affect sales and profit, this is not necessarily the only small business objective (Buttner & Moore 1997). In a competitive environment, the size of the firm and the nature of the operating context and the relatively ineffective support infrastructure can be detrimental to small and micro firms. Most of the accommodation providers are in this category (Beaver & Lashley 1998). The aim of this study is to identify the HR practices of the accommodation providers on Phillip Island and to discuss whether HRM theories are relevant to these hospitality firms.

HRM Definition and Theory

There has been confusion both about what HRM actually entails and what it delievers (McElwee & Warren 2000). According to Storey (1998), HRM can be labelled as either soft or hard. Soft HR, on one hand, is defined as “… a bundle of practices aimed at securing high commitment and high performance from employees.” (Storey 1998: 397). Hard HR, on the other hand, is defined as “… a group of practices based on the premise that human resources are a cost to be minimised.” (Storey 1998: 397). The common perception of hard HRM relates to practices with, no formal employee grievance mechanism, limited use of communication methods, little employee influence over management decisions, limited training efforts and relatively low wages (Arthur 1992). Nankervis, Compton and Baird (2005) refer to HRM including planning, hiring, skilling, and shifting the mix of talent according to the demands of the market place. It is open to debate as to whether this was intended to include the extended family in cleaning, cooking and late night reception duties. This form of psychological contract in terms of mutual expectations and reciprocal obligations can have inconsistencies (Rousseau & Tijoriwala 1998). The traditional, relational contract, in contrast to the transactional, economic, short term contract, is more family orientated (Atkinson 2007).

People are important resources to most organisation. In service based organisations, such as hospitality providers, it is often the human resources that are the crucial factor in delivering successful performance (Evans, Campbell & Stonehouse 2003). However, much of the literature that emphasises the benefits of HRM strategies encourages the use of the soft approach and aims at high commitment, high performance outcomes geared towards medium to large organisations (Storey 1998, Eaglen, Lashley & Thomas 2000, McElwee & Warren 2000, Lowry, et al. 2002, Evans, et al. 2003, Patel & Cardon 2010).

Human resource flexibility, as a method of achieving organisation performance, has not received the deserved the research attention. Employment flexibility is considered to consist of three distinct dimensions; skill, behavioural, and practice flexibility. These features encompass the management of skill resource flexibility, from and to different tasks, including behavioural requirements (Wright & Snell 1998). Staffing strategies and resource flexibility applied across different situations include employment planning, selection and training, and fair work pay schemes (Nankervis, et al. 2005). This can also be expanded to include job rotation, new skill acquisition, adaptability, multi skilling, and flexible compensation schemes (Wright & Snell 1998). Although there are various ways to interpreting the concept and the practice of HRM, there is a recognised concept that employees should be considered as a valuable resource that, if effectively managed rather than administered, can contribute significantly to organisational effectiveness. For the purpose of this study, the definition of HRM by Storey (1998) will be used. Different approaches include the unitary and pluralist, the latter being more adaptable to changing contexts.

HRM Theory and Practice in Hospitality

In terms of human resource implications for employers, the effect of seasonality makes it difficult for them to recruit full time staff and retain them (Koenig-Lewis & Bischoff 2005). Because workers are mostly temporary, staff relations and skills remain minimal, as little training is provided to them (Murphy 1985, Price 1994). This in turn makes it difficult to maintain product and service quality standards (Baum 1999). In addition, seasonal work is often considered less ‘meaningful’and tends to attract less educated and semi skilled or unskilled labour (Koenig-Lewis & Bischoff 2005). For the casual employee, there is the lifestyle issue, the freedom to choose when and where to work, and for some, the prospect of a permanent position (Garsten 1999). Many non permanent workers do not have long term expectations, but still give their full commitment, and are satisfied with flexible and short term arrangements (Lester & Kickul 2001). This type of casual service work can be convenient in the lifestyle fit with people balancing work and study (Campbell 2000). Moreover, the benefits for these part time and casual employees are that they get to work in attractive surroundings. In some areas, workers are temporary and have to move to find employment in other areas, not in the same seasonality cycle. Examples could be from snow areas in winter to beach areas in summer. Casuals are, therefore, not necessarily reluctant participants in flexible work strategies (Pocock, Prosser & Bridge 2004).

HR studies that attempt to provide a framework to small businesses in the hospitality sector tend to take either a non strategic HRM approach (Storey 1998) or an operational approach to HRM (Kelliher & Johnson 1997, Beaver & Lashley 1998). In addition, there is an assumption that businesses will have a strategic plan, but small business plans are often without strategic HRM plans (Humphrey 2004). Studies have consistently reported that owners and managers of SMEs are generally weak in the fundamental skills of strategic planning, financial management, HRM and marketing (McElwee & Warren 2000). Price (1994) identified that the hotel industry has a lack of interest in personnel management and training, with few staff having a job description, overtime without pay, and an essentially impersonal approach, based loosely around what is legally possible. In a more detailed study of ten major hotel groups, Guerrier and Lockwood (1989) investigated current practices in flexible working in the hotel industry. Managers noted the benefits of developing a strong flexible core of management staff, with opportunities for training and career progression, but the skilled operative level (jobs such as receptionists, kitchen staff, chambermaids) continued to live with high levels of labour turnover and rely on the external labour market to fill vacancies. Employers view casuals as employees, but as self employed persons engaged on contracts for services as opposed to contracts of service (Mitchell 1988). The industry is, therefore, devoid of a clear career structure, with high staff turnover and low morale (Hjalager & Andersen 2001; Page, et al. 2001).

Some businesses avoid the difficulty of finding and training staff during peak seasons.These firms tend to resort to hiring family members or friends, which solves some of the issues associated seasonality. Therefore, family businesses are rather common within the hospitality industry with many independent hotels, restaurants and freehold where different individuals perform different roles within the business (Beaver & Lashley 1998). A study by Price (1994) on family business found that there were no formal procedures or regulations for employees as family members were available at all times to answer queries on hours, pay, holidays and to discuss grievances, and new staff have to ‘fit in’, both workwise and socially, otherwise they tend not to last long.

There are some studies that are offering alternative solutions to the shortage of literature on strategic HRM for the small providers in the hospitality industry. Works like those of Eaglen, et al. (2000), and Slattery, Selvarajan and Anderson (2006) look at some domains of HRM (i.e., training and development), but not HRM as a whole strategy. Patel and Cardon (2010) discuss the utilisation of HRM practices in their effectiveness in small firms facing product market competition. Hughes, et al. (2008) emphasise strategic thinking for the family businesses. Storey (1998) went further, however, and suggested a strategic non HRM alternative for managing HR in those hospitality providers.

While many small businesses continue to survive seasonality and competition, questions arise as to whether realistically they can be sustainable with the strategic threats of larger providers and those who are taking better care of their human resources. In addition, at some point in time, employers soon or later would register recruitment difficulties without a proper human resource planning. To support this, in a study by Beaver and Lashley (1998) many employers identified an inability to recruit the appropriately trained staff as the key difficulty. Training programmes are costly and time consuming to implement. Supply side difficulties can present barriers to participation where programmes are inappropriately structured, time tabled at busy periods for the owner/manager, or are too expensive. In contrast, a study by Roehling, et al. (2000) found that employees want to be loyal, and provided with the correct training, trust, empowerment and help in career development, are more committed to the business objectives. This of course requires time and money on the managers’ part and most of all a proper HRM framework especially designed for micro and small businesses in the hospitality sector.

Small firms have limited influence on employee productivity. Incorporating HRM practices can improve small firms’competitiveness (Williamson, Cable & Aldrich 2002). Therefore, needs based research and subsequent community feedback are part of developing and management of seasonally affected businesses. There is also a question, here, therefore, of how small businesses can use HRM business models, to manage the changes in both global and local demand.This research attempts to contribute to this educational outcome.



Phillip Island was discovered in 1798 and later named after Captain Arthur Phillip, the first governor. The first visitors were sealers and whalers, but later in the 1920s the original, now world famous,‘Penguin Island’ colony began. Local industries started with farming and cattle’s grazing, but the major source of revenue now, however, is tourism and associated activities, with fluctuating demand. These include the Grand Prix circuit, world championship racing, tour providers and shopping facilities. Consumers either live on the Island or visit on a seasonal shorter basis, staying at a variety of accommodation providers (3.5 million visits per annum). Recently the area has been described as Penguin Island on national television.


The purposeful sample consisted of 23 interviews with accommodation providers in various categories (Patton 1990). Interviewees across business types are shown in Table 1.

Table 1
Business type and respondents
Type of small business Numbers
Caravan parks (residential and tourist) 5
Motels/ hotels 9
Resorts 3
Lifestyle cottages 2
Bed & Breakfast 2
Others 2


A systematic approach was employed in the process and choice of methodology and method for this research. The study design employed the stages of identification of the researchers, selection of theoretical frameworks and perspectives, research strategy, method of data collection, analysis, and interpretation and writing (Denzin & Lincoln 1998).Whilst pre existing ideas, from the literature review, have been employed to examine the impact of seasonality, they have not been permitted to reduce the objective sensitivity to the question (Flick 2002). In order to achieve the aim of this research, pre existing knowledge of seasonality, and human resource flexibility combined with subsequent experience in a form of grounded theory, is used. Therefore, a qualitative exploratory method is selected, as this technique is most suitable when the purpose is to understand a phenomenon and define the problem more precisely (Berg 1995).

Themes are identified whilst the research is being conducted. The researcher allows deductions from pre existing theory to suggest specific research problems, but not permit this to constrain what is noticed (Ezzy 2002). Strauss and Corbin (1990) also observed that the most appropriate method used to understand human behaviour from the respondents’ perspective is qualitative research, with semi structured interviews as the qualitative method as used in this case (Crotty 1998).

The research framework is essentially ‘social action’, relating to the motivations of the business owner (Peacock 2004). The method of a case study has been chosen as it investigates contemporary phenomenon in a real life situation. The use of collective cases is not a method in itself, but an approach that also uses other methods (Yin 2003). The method includes structured interviews, with the benefit that they provide a reasonably uniform approach to compare interviews. When combined with semi structured interviews, they provide greater flexibility concerning perceptions and obtaining more indepth information. The semi structured approach, therefore, maintains a framework, but permits greater probing, acceptable to the interviewee (Fontana & Frey 2008). Problems concerning interviewer bias have not been overlooked and were minimised by appropriate interview preparation, and provision of adequate information prior to the interview, including objectives, similar phrases and terminology with and paraphrasing for clarification (Easterby-Smith, Thorpe & Lowe 1991, Kellehear 1993).

Using a purposeful sample the case and participants were carefully identified as small accommodation providers (Fontana & Frey 1998). Access was provided over a period of several years, by personal knowledge and the tourist information office. The interviews took between 30 and 45 minutes each, recorded confidentially with the researchers compiling transcripts to ensure that the data were full and accurate. In addition, all transcriptions were read and analysed several times to develop or identify possible themes. Using indepth semi structured interviews, the initial interviews were used to develop further ideas about the study and later refine specific points. These elements embraced owner/managers’ roles, and responsibilities; scope and significance of seasonal demand changes; critical events/impact on business management; HRM strategies and operational responses (viability and sustainability).


The method used in this research for data collection employed semi structured indepth interviews. The initial interviews were used to develop further ideas about the study and later to refine specific points. The interview questions are shown in Appendix One. Fields of the interview Topics/ Questions are listed.


To analyse the data, transcription, thematic analysis, and team briefings were used. The team briefings allow stimulation of search for meaning and significance, plus elaboration and additional depth of complexity. Thematic analysis was conducted, allowing categories to be identified from the data (Ezzy 2002). The mass of transcript data was reduced to smaller groups for analysis (Miles & Huberman 1994). Open coding was initially employed to identify and generate an emergent set of themes (Glaser 1978). Coding links the data to theory and this also permits the relevance of the pre existing theory to be tested (Straus 1987). Axial coding was, therefore, later conducted on the emergent categories, to further define what the data represented and explore these themes (Charmaz 1995, Cresswell 1998). Each transcript was analysed manually, identifying important words and phrases best describing participants’ responses to the questions and themes. Evidence adequacy was by similarity of results achieved, confirming the reliability of the responses.

As the sample was purposeful, with clear criteria and rationale for the selection of participants (Patton 1990), it was possible to also compare the results for different types of businesses from which the research was drawn (Kellehear 1993). Straus and Corbin (1990) specify that axial coding should focus on: strategy, process and consequences. This notion is, therefore, relevant to this study, and the analysis developed the following two themes. These themes are 1) HRM strategies and process, and 2) operations, including marketing strategies and approaches. These notions are presented as Appendix Two in the interview thematic analysis chart.


HRM Strategies

The findings indicate that in response to natural seasonality, during the busy summer period, due to the challenge of finding appropriate employees, operators usually did not lay off staff during the quieter winter. Instead, they were paid less, for less work, and they adapted their spending to the lower income. As a further method of adaptation, the view was that hospitality managers take holidays in the off season (Interview 1). In addition, many of the staff were friends or relatives, but there is a reluctance of the owners children to take up the businesses, creating a succession problem.

You have to utilise who you have here, but in the same time, we are not cutting out too many people another very important thing is good staff, and you know just we do not minimize the people hours to the point where they have to go and get another job and if they are very good staff member we will utilise them in a lot of different other ways if we can. (Interview 1)

Other examples of human resource issues were identified in the interviews. A succinct list is given.

The challenge is to find enough work to keep casual working in winter. (Interview 8)
Casual- less socialising in winter, need less money. (Interview 8)
We over employ to keep people. (Interview 8)
No staff, so less affected, lesser cost. (Interview 9)
Difficulties obtaining staff. (Interview 10)
July and August are the slowest but we still get enough through to keep going.
We work with a lot of permanent casuals, permanent part timers. Some of the staff we still have trouble getting able to find casuals. (Interview 2)


The strategic application by business groups of special events, such as the motor racing, usually included in the description of institutional seasonality, has reduced the impact of natural seasonal fluctuation demands. In addition, from a practical perspective, a constructive method of incorporating the seasonal changes is to utilise the time for maintenance work. Most repair work done is done in the off season, the type of work being more physical (Interview 7), and suitable for periods when tourists were not present on the premises, to avoid building hazard safety problems.

Operationally, some caravan parks also have different categories of services, these being part annual, long stay, and part tourist (Interview 14). This balances out service supply, and revenue. In addition, operators expected to use profits from the summer to subsidise the winter, or increase the overdraft. A specific issue is the need to comply with strict regulations for health and safety, and other legal requirements. This requires maintenance in the off season (Interview 2).

There was less seasonality, and, therefore, supply adjustment for those who are part of motel chain (Interview 2).

Operational marketing strategy activity is required to managing demand fluctuations. It concerns natural seasonal fluctuations, with the extremes varying from overbooking to no bookings. However, the mitigating effect of small businesses using institutional seasonal events to create demand, such as the bike Grand Prix, and the constant demand for penguin sighting, has reduced extreme fluctuations.

This aspect of managing the impact of seasonal demand changes on different market segments also concerns identifying and managing the different types of guests: young singles, retirees, packages, international visitors, couples and families. Other strategies attempted to redress demand imbalance through pricing and marketing initiatives such as special packages for return visitors or targeting special interests groups such as schools.

There’s been heaps of winter strategies done by different tourism bodies for Phillip Island and no doubt Mornington Peninsula over the 20 years I’ve been in the industry and really, I don’t think anyone really knows what the answer is and the other thing too, because you want people to have a really good experience, it’s very hard to encourage someone to come down here when it’s blistering cold (Interview 1).


Interviewee responses demonstrate the application of human resource strategies using casual and flexible work practices, specifically the challenges of pay rates and finding suitable staff. This type of worker requires higher levels of supervision to achieve desired outcomes (Hall 2006). These small businesses, therefore, demonstrate the capacity to make human resource decisions in order to create flexible workforce practices (Holland & DeCieri 2006). This finding is particularly relevant in terms of the employee and employer relationship in small businesses, using a flexible skills approach and family labour. The literature on HRM in small firms identifying that HR practices are more ad hoc in small accommodation providers is endorsed (Patel & Cardon 2010).

In a comparative approach, similarities and differences were identified between the findings and aspects of the literature review. Business owners discussed the pleasures of independence, but also having to rely on their families. This can involve resistance to involving families in business together. They tended to strive for a separation of family and business, but this often not possible. This research also identified findings similar to those of Baines and Wheelock (2000) where demand for labour was solved by variable, long hours and traditional gender divisions of labour in home and work. Clearly, for the employer, peripheral staffing arrangements represent huge long term cost savings and play a vital role by allowing‘just in time’staffing during times of peak demand. Interestingly, this observation is in line with the findings of Evans, et al. (2003), who identified training opportunities, higher level of pay and bonuses and attention to job design and roles via: job enlargement; job rotation; job enrichment; and job sharing as relevant to the industry. These forms of small business are, therefore, operating simultaneously both traditional and transactional forms of psychological contract, for the family and relief staff (Rousseau & Tijoriwala 1998, Atkinson 2007). HRM in small businesses can, therefore, also be problematic, with different expectations in the same working group.

It would thus also be supported that hospitality providers have more challenges retaining long term employees than other businesses in the tourism sector (Burns 1997). This includes: unspecified hiring standards; multiple ports of entry; low skill specificity; no on job training; and no fixed criteria for promotion and transfer. In addition, the most commonly used recruitment method of small tourism firms was word of mouth. Finally, training is still not important for many tourism firms. This weakness provides another reason for high turnover rates within the industry (Burns 1997). These approaches also require flexible service skill capabilities, with adaptation to different consumer requirements, wages and lack of career prospects. This also confirms a lack of congruence between HRM ‘soft’ academic theory and the ‘hard’ reality of the unwillingness of owners to implement human resource strategies that would cost them time, effort and money (Hughes, et al. 2008, Patel & Cardon 2010).

The findings also support that a significant factor in the service sector is flexible work arrangements (Smith 2005). This includes part time and temporary employment (Kalleberg 2000). The impact of seasonality varies in types of creating different levels of HRM strategic challenge, for tourist operators and employees in the labour market (Ball 1988, Mourdoukoutas 1988). However, this flexibility management approach also fits well with the flexible life style of people in this sector (Walker & Brown 2004). The interview quotes reflect the literature concerning seasonality and strategies concerning service operation. Specifically, using slower demand periods to conduct upgrades of equipment, and changes of food service provision, which reflects the findings of Walker and Brown (2004), that small business owners adapt to change in demand by including changes of personal lifestyle.

The interview responses demonstrate marketing responses to demand fluctuations are relevant to different forms of consumer behaviour and adjusting the marketing mix. Some examples are school groups in winter, international visitors more often, and bonus packages. This finding is similar to the marketing practice of identifying different short and long term goals, adapting variable pricing policies (Humphrey 2004).

Operational approaches were also adapted, by offering different forms of tourist services, and using quiet times to conduct maintenance work. Operational marketing strategies include targeted packages, and price cutting. These could all be linked to an integrated small business strategy, designed to manage the seasonal demand fluctuations. These management strategies, as designed by the tourist authorities, have permitted the sustainability of the destination, now expanding with new events and stakeholders. Evaluation and validity was attempted by discussion of the results with providers (Lincoln & Guba 1985).


The theme of this research case study was to examine the management processes and the relevance of HR theory on the management practices in the operation of hospitality businesses located on the popular Phillip Island destination in coastal Victoria. As anticipated from the literature, the findings identified that there is a gap between the theory and practice of HRM in the hospitality sectors, especially in small and micro businesses. The findings support the research on the lack of soft HRM practices amongst accommodation providers on Phillip Island, Victoria.

Stakeholders’ experiences are that they use the HRM processes of flexible work employment practices, employment of casual staff, owner and family members activity flexibility, and multi skilling adaptation to different conditions. These findings are similar to the previous academic research, except that this form of research on staffing flexibility and with these types of small businesses is rare, especially where personal blood relationships are involved. This can bring a different form of interpretation in terms of the theoretical definitions and processes HRM, to the realities of small business management. The relevance to HRM is that the service sector relies on its staff contributing to success. The inclusion in business planning of more strategic HRM approaches could increase the outcomes of the employee and employer relationship. The contribution is hopefully, that employers could, therefore, benefit from the application of a pluralist approach, with relevant flexible strategic HRM approaches, recognising that employees are fundamental in the achievement of organisational objectives.


Funding from the Department of Management, and all academic staff involved, whose names are not on the title. These include Damian Morgan, Richard Winter, Robert Gaulton, Caroline Wan and Jenny Tame.


Dr. Peter Townsend is a lecturer in the Department of Management at Monash University, Melbourne, Australia. Previously, he was a management consultant in London, and later the training and development manager, for a major multinational organisation, based in Singapore. His specialised area of research is international human resource management, with recent publications including books and articles on cross cultural training and adaptation.


Dr. Christine Lee is a lecturer and tutor at Monash University, specialising in international business and tourism. She is a prominent leader in local community engagement activities, and has published widely, including from major national research projects in tourism.



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Appendix 1

Interview Questions

Owner/Manager Roles

Current job: Tell me a little about yourself

History: Tell me about how you got into this business

Organisational values and beliefs: Tell me about what this business is like

Scope and Significance

Critical Events

Nature of Events

Human Resource Management

Interview Thematic Analysis Chart
Theme Interviewees Examples of quotes
Casual staff 1, 7, 8 All staff are casual, different times, five days a week
Multi skilling and flexibility 1, 8, 9 Hospitality managers take time off in the winter
You have to utilise who you have here, … but the important thing is good staff, so we utilise them in a lot of different ways if we can
Casual staff
Changing work practices and staffing 7, 11,14,18
Flexible work practices 8 Cost of labour, use of casual staff, in office
8 Use of part time, casual staff, challenge of seasonality
Casual staff Staff spend less in the winter
Over and under employment
Family business and employment relationship 9,8 No permanent staff, so not directly affected by seasonal demand
Staff do not want to be permanent
Quality of skills 10, 2, 7, 4 Friends are used to help out
Family business relationship 10 Kids not interested
11 Casuals are (always) about
14 In the summer, peak season by family
16 Hard to find reliable people
18 Peak period they stay longer
19 Family to run the business as it is, 24/7
Flexible work pattern 2, 16 Maintenance in off season
Part of motel chain
Flexible work and skill process 3 Challenge of food regulations
7 , 16 Most repair work done in the off season
9 Create break for gaps, close down for a while
Spreading of financial
Income and expenditure
10 Overdraft!
12 Not main revenue source
Casual and skill flexibility 14 Spread revenue over the year
14,18 Need to take seriously
9,8 Substitute workers
16 Supplement with other income
18 Operate at all times
Advertising 1, 5 Use of web site and internet, papers
Relationship Marketing 7 Loyal customers
Different market segments 8 Grand prix market
Different market niches for each season
Coffin bus
Wednesday weather forecast is critical
Market of large volume in young people
Clients are schools, education people
Discounts and beach culture
International and Japanese
Packages 9 Flexible marketing for kids and adults
Seasonal demand changes 10 Overseas visitors
Customers are friends
12 Work with competitors
Seasonal occupancy
Competitors 14 Use of Phillip Island Tourist Association
Pricing policies 16 Off season market enjoy cool weather
Use of discounts